The Federal Ministry for Economic Affairs, led by Katherina Reiche (CDU), plans to place the industrial electricity price subsidy under a budgetary reserve. This requirement was detailed in the “charitable guideline” (Billigkeitsrichtlinie), as reported by Politico’s newsletter “Industry and Trade”.
According to the guidelines, if the calculated subsidy claims exceed the funds available in the state budget, payouts can be proportionally reduced. The rule stipulates that “the provision of the charitable benefit is subject to the availability of the required budgetary funds in the respective payout year”. Furthermore, in the event of insufficient funds to cover all scheduled benefits, “all charitable benefits will be cut proportionally”. Notably, the guidelines state that there is no absolute “right” to receive this subsidy; participation instead relies on the “mandatory discretion” of the approval authority, the Federal Office for Economic Affairs and Export Control (Bafa).
The initiative aims to provide approximately 10,000 energy-intensive companies with access to a state-subsidized electricity price of five cents per kilowatt-hour. The state will responsible for covering the difference between this targeted price and the established wholesale market rate.
However, the subsidy includes several specific limitations. First, the benefit is only applicable to 50 percent of the total electricity consumed. Second, while the wholesale price is reduced by 50 percent, it cannot fall below five cents. Finally, companies must commit to investing 50 percent of the total subsidy amount into decarbonization efforts. These details are regulated in the guideline, which is scheduled to be published in the Federal Gazette in the coming days, at which point it will come into effect.
